Housing Supply and Land Use Regulation in the Netherlands

Tinbergen Institute Discussion Paper No. 07-058/3

42 Pages Posted: 31 Jul 2007

See all articles by Wouter Vermeulen

Wouter Vermeulen

CPB Netherlands Bureau of Economic Policy Research; VU University Amsterdam - Department of Spatial Economics

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Date Written: July 2007

Abstract

In spite of a growing recognition of the importance of supply conditions for the level and volatility of house prices, empirical work on housing supply outside the US is scarce. This paper considers various measures of housing supply in the Netherlands, where real house prices have roughly tripled since 1970. Besides the volume of investment in residential structures, and new housing construction in units, we derive time series of structure and location quality in a hedonic analysis. Each of these variables appears to be almost fully inelastic with respect to house prices in at least the short to medium long run. Further analysis of the quality of location index shows that conventional models of competitive land and housing markets cannot account for these findings. However, they may be well explained in terms of the rather extensive body of interventions by the Dutch government.

Keywords: housing supply, residential investment, housing markets, land use regulation

JEL Classification: E22, R31, R52

Suggested Citation

Vermeulen, Wouter and Rouwendal, Jan, Housing Supply and Land Use Regulation in the Netherlands (July 2007). Tinbergen Institute Discussion Paper No. 07-058/3. Available at SSRN: https://ssrn.com/abstract=1003955 or http://dx.doi.org/10.2139/ssrn.1003955

Wouter Vermeulen (Contact Author)

CPB Netherlands Bureau of Economic Policy Research ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

VU University Amsterdam - Department of Spatial Economics

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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